Allowed

Sri S. Mahaboob Basha, v. M.D., The Tsrtc.

Telangana HC28 Nov 2022WP/15106/2018

Case brief

AI extract

What is this about?

The High Court allowed four writ petitions challenging TSRTC's demand for GST on license fees. Ruling that GST replaced service tax under a new constitutional regime, the Court held the Operators' agreement covering service tax extends to GST, barring any additional levy beyond the license fee.

What did the court decide?

Writ petitions allowed; impugned GST Model Invoices/ Demand Notices set aside.

Sri S. Mahaboob Basha, Vs M.D., The Tsrtc. — Service and Employment | Telangana HC (2022)

¶1

[^331e ]

¶2

HIGH COURT^{FORTHE STATE OF TELANGANA} AT HYDERABAD (SPecial Original Jurisdiction)

¶3

MONDAY, THE^{TWENTY EIGHTH DAY OF NOVEMBER} TWO THOUSAND AND^{TWENTY TWO}

¶4

PRESENT

¶5

THE HONOURABLE^{SRIJUSTICE T.VINODKUMAR} AND

¶6

THE HONOURABLE^{SRIJUSTICEPULLA KARTHIK}

¶7

WRIT PETITION^{NOS:150831510315106 AND 15159 0F 2018}

¶8

W.P.No.15083 of 2018

¶9

Between:

¶10

Smt. B.Ram^{Mohan Rao,S/o B. Krishna Murthy,-Age35, Occ business'} R/o iign"in Virat^{Regency, Jadcherla, Mahaboob Nagar District'}

¶11

...PETITIONER

¶12

AND

¶13

The TSRTC, rep.,^{by its Managing Director and Vice Chairman Bus Bhavan'} Musheerabad,^HYderabad.

¶14

2 The Regional^{tvlanager,TSRTC Ranga Reddy Region, Ranga ReddyDrstrict}

¶15

The Depot Manager,^{TSRTC, JubleeBus Station' Ranga ReddyDistrict'}

¶16

The Deputy Chief^{Traffic Manager, Ranga Reddy Region, RangaReddy} District.

¶17

(RR 2 to 4 cause title^is amended^{as per Court Order dated 21-06-2018in} I A No 2 of 20'18)

¶18

...RESPONDENTS

¶19

Petition under^{Article 226 of the constitution of lndia praying that in the} circumstancesstatedintheaffidavitfiledtherewith,theHighCou(maybe. pteaseO too issue a writ, order^{or direction more particularlyone in the natureof} irrlandamus or any^{other appropriatewrit declaringthe action of the respondents} i"uying Gooos ,no^{Setuices Tax (GST) on the licensefee payable by the} p"titioil"r for the license^{granted to carry on business, trade and vocationis in} ,iot.tion of the terms^{of ticense granted in favorof petitioner as illegal,arbitrary,} in violation of^{principles of naturaljustice and fair play'}

¶20

Contd....2

¶21

r.A.NO:^{1 0F 2018}

¶22

Petition under^{Section 151 CPC praying that in the circumstances statedin} the affidavit^{filed in suppoiioi tn" p1[it'on' int nigt' court mav be pleased to} direct the^respondents "ot^{i;i";y ;yGoods and -S-ervices Tax on the license} fee^{payableby the petitioriet-i6' -t(" license grantedto carryingon trade'} business or^vocation.

¶23

Counsel for the^{Petitioner: SRI'D'V'CHALAPATHIRAO}

¶24

Counsel for^{the Respondents: SRI'THOOM SRINIVAS(SC FORTSRTC)}

¶25

W.P.NO:1^{5103oF 2018}

¶26

Between:

¶27

Sri V. Veera^{Narayana. S/o Chinna Jelaiah- Age 35 vears Occ ; Business'} R/o.H.No.',l2-587186^{seetnailtm;;;i'R";i N; iintira ua{ar', secunderabad'}

¶28

...PETtTIONER

¶29

AND

¶30

The TSRTC^reP by its Managing^{Director andViceChairman Bus Bhavan'} Musheerabad.^H yderabad

¶31

2 The Regional^{Manager. TSRTC Ranga Reddy Region' Ranga Reddy} District

¶32

The^{Depot Manager' TSRTC, JubleeBusStation' Ranga Reddy District'}

¶33

The Deputy^{Chief Traffic Manager' Ranga ReddyRegion' Ranga Reddy} District

¶34

...RESPONDENTS

¶35

Petition Under^{Artrcle 226 of the Constitution.oflndia praying that in the} -riled therewith. the Hiqh court may be circumstances^{statedin rl"-liiiiruit} pleased to issue^{a writ ordJr i'l'rectionmore particularlv one in the nature of} Mandamus^{or anyotner api'oi'iatewrit declarrng the actibn of the respondents} levying^{Goods rno s",,,.LJi"-tCsrlon thi licensefee payable by the} petitioner for the^{lrcense gi"'nt"Jto't"ryon businesstrade and vocation is in} violation of^{the terms o, ,,."-n."grrnteo in tavor of petitioner as illegal'arbitrary'} in violation of^{princrples of natural lustlce and lalr play}

Contd....3

r.A.NO: I^{OF 2018}

Petition under^{Section151 CPC praying that.in the circumstances statedin} the affidavit^{filed in suppori} "i^{tn" p"iition it," HigJt Court may be pleased to} direct the^{respondents not io-levy any Goods and Services Tax on the license} t"" pryrOi" ty^{the petitionlr- f6r tne license granted to carrying on trade'} business or^vocation-

¶40

Counsel for^{the Petitioner: SRI'D'V'CHALAPATHIRAO}

¶41

Counsel for^{the Respondents: SRI'THOOM SRINIVAS (SC FORTSRTC)}

¶42

W.P.NO: 15106 0F²⁰¹⁸

¶43

Between:

¶44

Sri S' Mahaboob^{Basha,S/o, lmansha, Age 44 years, occ ; Business, Rlo.315224'} Raja Kuntla.^{Warangal District}

¶45

...PETITIONER

¶46

AND

¶47

The TSRTC^{rep., by its Managing Director andVice Chairman Bus Bhavan'} Musheerabad,^HYderabad

¶48

The Regional^{Manager, TSRTC. Mahaboob Nagar Region'Mahaboob Nagar} District.

¶49

The Depot^{Manager, TSRTC MahaboobNagar' Mahaboob Nagar District'}

¶50

The Deputy^{Chief Traffic Manager, Mahaboob NagarRegion' Mahaboob} Nagar District

¶51

...RESPONDENTS

¶52

Petition Under^{Articte 226 of Ihe Constitution of lndia praying that in the} circumstances^{statedin tne atfrOavit filed therewith' the High Court maybe} ;i";t;^{i" issue a writ, otJ"t Lt Jirection more particularlyone in the nature of} Mandamus^{or anyother approprlatewrrt declaring the action of the respondents} iuryirg G".0.^{,nO S"rui.LtTax (GST)on the license fee payable by the} petitioner for the hcense^{girnt"Oto'carryon business' trade and vocation is in} Iioirtion of the^{termsof lriense granted in favorof petitioneras illegal'arbitrary,} in violation of^{principles of natural justiceandfair play'}

Contd....4

-4-

t.A. NO:'l OF 2018

PetitionunderSectionl5lCPCprayingthatinthecircumstancesstatedin the affidavit^{filedin supportof the petition,ine Uign Court may be pleasedto} direct the respondents^{not to levy any Goods and Services Tax on the license} t"" i"V"Ui" ty^{tne petitioner for the license grantedto carryingon trade'} business or vocation.

¶57

Counsel for the^{Petitioner: SRI.D.V.CHALAPATHI RAO}

¶58

Counsel for the^{Respondents: SRI.THOOM SRINIVAS(SC FOR TSRTC)}

¶59

W.P.NO: 15159^{0F 2018}

¶60

Between:

¶61

Smt. B. Padmavathi'^{Wo. B. Krishnalvlurthy, Age56, occ. business, R/o, Yagnesh} Viiat neg"n"y, Jadcheria'^{Mahaboob Nagar District'}

¶62

...PETITIONER

¶63

AND

¶64

I The TSRTC, rep.,^{by its Managing Director and Vice Chairman BusBhavan'} Musheerabad,^HYderabad

¶65

2 The Regional^{Manager, TSRTC, Mahaboob Nagar Region Mahaboob Nagar} District.

¶66

The Depot^{Manager, TSRTC., Mahaboob Nagar' Mahaboob Nagar District}

¶67

The Deputy Chief^{Traffic Manager' Mahaboob NagarRegion' Mahaboob} Nagar District.

¶68

..RESPONDENTS

¶69

Petition Under^{Article 226 of the Constitution of lndia praying thatin the} cir"umstinils^{stated in the affidavit filed therewith'the High Court maybe} ia.re a writ,^{oroer or direcrron more particutartyone in the nature of} ;i;;;-i; fulandamus or^{anyother appropriatewrit declaringthe action of the respondents} i""Vi"g GooOt ,no^{S"rui""t Tax (GST)on thL licensefee payableby. the} oetitionerfortheltcensegrantedto'Carryonbusiness'tradeandVoCationisin ;;i;h; "i th; Li*.^{ot liiensegranted in favor of petitioner as illegal, arbitrary,} in violation of^{principles of naturaljustice andfair play}

Contd...5

|.A.NO:1 OF 2018

Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be^pleased to direct the respondents not to levy any Goods and Services Tax on the license fee payable by the petitioner for the license granted to carrying on trade, business or vocation.

¶74

Counsel for the Petitioner : SRI.D.V.CHALAPATHI RAO

¶75

counsel for the Respondents : sRl.THooM sRlNlvAS (sc FoR TSRTC)

¶76

The Court made the following COMMON ORDER

¶77

ITHE HON'BLE SRI JUSTICE T. VINOD KUMAR AND

¶78

THE HON'BLE SRI JUSTTCE PULLA KARTHIK

¶79

WP. No.s 15O83 1s103 151O6 and 15159 of 2018

¶80

COMMON ORDER: (per Hon'ble Sri Justice T.Vinod Kumar)

¶81

In all these Writ Petitions, the petitioners have assailed the action of the respondents in lelying/demanding GST for the premises, wherein the petitioners were permitted to set-up and run the specified business by granting licence, as being illegal, arbitrary, without any authority of law and contrary to the Deed of Licence entered into between the parties.

¶82

Heard Sri D.V.Chalapathi Rao, learned counsel appearing on behalf of the petitioners and Sri Thoom Srinivas, learned Standing Counsel appearing on behalf of the respondents, and pemsed the record.

¶83

Petitioners contend ttrat they were granted licence by the respondents to run their business from the premises belonging to the respondents on paJrment of agreed licence fee in terms of clause{4) o[ the said Deed of Licence; that for the said purpose, the respondents have entered into an agreement with the petitioners titled as'Deed of Licence'; and ttrat the respondents have issued t.l'e notice, impugned in thesc Writ Petitions, terming the same to be GST Model Invoice, rvhereunder the respondents are claiming that the petitioners are

¶84

¶85

liable to pay the GST in addition to the licence fee as shown in the said modei invoice.

¶86

Petitioners further contend that the claim made bv the respondents under thc impugncd GST Model Invoice is contraq/ to ttre terms ageed between the parties under the Deed of Licence, in particular, clause(52) thereof 1.as per the Deed. of Licence in WP.No.1.5159 of 2O1B); that in terms of clause (52), the licence fee, is inclusive of the service tax leviable under the Finance Act, 1994; and that since the Finance AcL, lgg4, levying servicc tax is repealed ald in its place GST Act having been introduced, thc liability of pa5rrnent of service tax which has taken the name of GST is on the respondents and no claim can be made from the petitioners.

¶87

Counter aJlidavit on behalf of the rcspondents is filed in WP.No.15159 of201g. By the said ccunter afhdavit, the respondents would contend that with thc introduction of GST Act w.e.f. Ol.O7.2Ol7, the respondents are entitled to make a claim for pa5,nnent of GST from the petitioncrs inasmuch as the same has not been provided under the Deed of Licence.

¶88

Leamed Standing Counsel appcaring for the respondents would further rely on Clause (46) ard Clause (50) of the Deed of Licence in respect of Wp.No_ 150g3 of 20lg, (corresponding Ctauses in WP.No.s 15103, 15106, and. t5t59 of 2O18 ore Ctauses (38) and ft2)) to contend that the petitioners being licencees arc liable to pay the

¶89

¶90

GST and all incidental^{charges, taxesand other charges levied by the} Statutory Authority,^{as being claimed by the respondents'}

¶91

For appreciating the^{rivalcontentionsurged, it is necessaryto} examine tl-e reievant^{clauses of the 'Deed of Licence' entered into} between the^{parties.For the ease of reference, the saidclausesas} referred to in^{WP.No. 15O83of 2018 are extracted hereunder:}

¶92

"46. The^{Licenceeshall be govemed by all the statutory} provisions prescribed by the^{State/ Central/ Local Laws and} obtain requisite Licence/Certifrcate/permission/Approval as may be necessary or required^{from the concemedauthorities} from time to time for doing^{his/her business,at theirown} cost and shall^{pay all taxes/fees or other sums,if any} required to be^{paidto the concemedauthorities'}

¶93

¶94

All incidental charges,^{taxesand other charges} levied by the Statutory^{Authorityfrom timeto time are to be} borne by the^licencee."

¶95

A reading of the above^{clauses, on which relianceis placed by} therespondentstojusti$theirclaim,indicatesthatboththeclauses relate to the obligations,^{which the licencee, like the petitionersare} required to undertake/discharge^{as4-ub the statutory authorities'} for carrying on their^{businessfrom the premises licenced to them b:1} the respondent,^{Iike obtaining trade licence,payment of VAT/GSTon} the sale of^goods, etc.,^{and does not governthe interse relationship} between the^parties i'e.,^{petitionersand the respondents'and the} payment of taxes/fees^{payablethereunder'}

¶96

¶97

On the otherhand, Ciause (52) of the^.Deed of Licence, as entered into between the petitioner and respondent would indicate that it is the respondents, who have categorically agrecd under the Deed of Licence that service tax if any applicablc in respect of the imrnovable property leased to tJ-e petitioners under the Deed of Licence wiII be bome by the Corporation. The said clause in WP.No.15O83 of 2018, (corresponding Clause (4O) in Wp.No.s 15tO3, 151O6, and 15159 of2018) reads as follows:

¶98

"52. The service tax if any applicable on renting of immovable properties of thc corporation, rvill be borne by the corporation.

¶99

Since, there is a written agreement betwecn the parties termed as 'Deed of Licence', the partics are governed by the covenants therein.

¶100

The claim of the respondents in the counter affidavit that GST being introduced w.e.f. Ol.OT.2OlZ arrd rhe said lcly being a new levy, the same is not governed by Clause(S2) of the Deed of l-icence, cannot be accepted for the reason that the GST has been introduced subsequent to the Constitutional Amcndmcnt by insertion of Article 246A of the Constitution, whereby ler,y of service tax undcr the Finance Act, 7994 arrd le,y of VAT under thc pror"isions of the State enactment have been repealed and in its place, a comprehensive enactment, called 'GST Act', has been introduccd. It is not even the

¶101

¶102

case of the respondents that in addition to the levy of Service Tax, they have been fastened with the new levy under the GST Act, which the petitioners are required to discharge/pay in addition to the lease rent reserved under the agreement.

¶103

That being so, this Court is of the view that the claim of the respondents that GST being a new levy, the petitioners are liable to make such payment in addition to licence fee reserved, for which the impugned Model GST Invoices have been issued, cannot be accepted as^justified for it being upheld.

¶104

For the above reasons, the petitioners in all the writ petitions are liable to succeed-

¶105

Accordingly, all these Writ Petitions are allowed and the impugned Demand Notices, in the form of GST Model Invoices, arc ser aside. No order as to costs.

¶106

15, Consequently, miscellaneous petitions pending, if any. sh;rll stand closed in the light of this f-rnal order.

¶107

SD/-P.PADMANABHA^REODY ASSTSTAyI. REGISTRAR ,TRUE COPY// ( -)l) SECTION OFFICER

¶108

¶109

'1. The Managrng Director and Vice Chairman, TSRTC, Bus Bhavan,

¶110

Musheerabad, Hyderabad.

¶111

The Regional Manager, TSRTC Ranga Reddy^{Region, Ranga Reddy District}

¶112

The Depot lrlanager. TSRTC, Jublee^Bus Station,^{Ranga Reddy.District.}

¶113

The Deputy Chief Traffic^tvlanager, Ranga^{Reddy Region, Ranga Reddy} District.

¶114

OneCC to SRI D V CHALAPATHI^{RAO, Advocate (OPUC)}

¶115

6 One CC to SRI THOOM SRINIVAS^{(SC FORTSRTC) (OPUC)}

¶116

Two CD Copies

¶117

B One soare copy

BS.+\ -

HIGH COURT

DATED:2811112022

COMMON ORDER

w.P.NOS.15083, 15103,

¶124

15106 AND 15159 0F 2018

¶125

1tr E STAI€: .<br>|<br>//a
)'.
I/;
17 JAt{ 2$n )l
l,!c>
\11V+
\ ?

¶126

ALLOWING THE WRIT PETITIONS

¶127

WITHOUT COSTS.

¶128

,.--
-y
\<br>\1.ry

Sri S. Mahaboob Basha, v. M.D., The Tsrtc.

Case brief

What is this about?

What did the court decide?

Sri S. Mahaboob Basha, v. M.D., The Tsrtc.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Grasimindustries Limited. Vs Assistant Commissioner (Ct)Ltu)

Rsv Rice Industries and 26 Others Vs State of Telangana and 5 others

M/s Pavan Motors Pvt. Ltd. Vs Union of India

M/s.Marvel Hospitality Services (P) Ltd. Vs The Assistant Commissioner (Ct)-Iv

M/S. Nagini Deluxe Theatre a/C (Alekhya), Karimnagar Dist. Vs the Entertainment Tax Officer, Godavarikhani and 4 Others

Smt. B. Padmavathi, Vs The Tsrtc